AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 17, 2004
REGISTRATION NO. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CANDIE'S, INC.
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(Exact name of registrant as specified in its charter)
Delaware 11-2481903
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation)
215 West 40th Street
New York, New York 10018
(212) 730-0030
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(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Neil Cole, Chief Executive Officer
Candie's, Inc.
215 West 40th Street
New York, New York 10018
(212) 730-0030
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(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Robert J. Mittman, Esq.
Ethan Seer, Esq.
Blank Rome LLP
405 Lexington Avenue
New York, New York 10174
Telephone (212 885-5000
Facsimile: (212) 885-5001
Approximate date of proposed commencement of sale to public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. |X|
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier registration
statement for the same offering.
[-]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration for the same
offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [_]
Calculation of Fee
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Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered registered aggregate price per unit aggregate offering price registration fee
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Common Stock $.001 314,981 (3) $ 5.79 (4) $1,823,740 (4) $231.07
par value (1)(2)
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(1) Represents: (i) 214, 981 shares of the registrant's common stock to be sold
by the selling stockholder that were issued to the selling stockholder by
the registrant pursuant to an Asset Purchase Agreement and (ii) an
additional 100,000 shares of common stock which represents the registrant's
good faith estimate of the maximum amount of additional shares of its
common stock that may be issued to the selling stockholder pursuant to a
provision in the Asset Purchase Agreement that provides, under certain
circumstances, for an upward adjustment in the number of shares of the
registrant's common stock issued to the selling stockholder.
(2) Includes preferred share purchase rights. Prior to the occurrence of
certain events, the preferred share purchase rights will not be evidenced
separately from the common stock.
(3) Pursuant to Rule 416 of the Securities Act of 1933, there are also being
registered such additional shares as may be offered or issued to the
selling stockholder to prevent dilution resulting from stock dividends,
stock splits or similar transactions.
(4) Estimated solely for purpose of calculating the registration fee. Pursuant
to Rule 457(c) of the Securities Act of 1933, as amended, the registration
fee has been calculated based upon the average of the high and low prices,
as reported by Nasdaq, for the registrant's common stock as of November 10,
2004.
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
PROSPECTUS
CANDIE'S, INC.
214,981 shares of Common Stock
The selling stockholder listed on page 9 of this prospectus is offering
for resale up to 214, 981 shares of common stock beneficially owned by it. The
common stock may be offered from time to time by the selling stockholder through
ordinary brokerage transactions in the over-the-counter markets, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale or at
negotiated prices and in other ways as described in the "Plan of Distribution".
We will not receive any of the proceeds from the sale of the shares by
the selling stockholder.
Our common stock is listed on the Nasdaq National Market under the
symbol "CAND" On November 15, 2004, the last sale price of our common stock as
reported by Nasdaq was $6.11 per share.
Investing in our common stock involves a high degree of risk. For more
information, see "Risk Factors" beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ________, 2004
Table of Contents
Page
Forward-looking Statements.....................................................3
The Company....................................................................3
Recent Developments............................................................3
Risk Factors...................................................................4
Use of Proceeds................................................................8
Selling Stockholder............................................................9
Plan of Distribution...........................................................9
Legal Matters.................................................................11
Experts.......................................................................11
Where You Can Find More Information...........................................12
Incorporation of Certain Documents by Reference...............................12
2
Forward-looking Statements
Certain statements in this Registration Statement or the documents
incorporated by reference in this Registration Statement constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Candie's, Inc. to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
those set forth under the caption "Risk Factors." The words "believe," "expect,"
"anticipate," "intend," and "plan" and similar expressions identify
forward-looking statements. Readers are cautioned not to place undue reliance on
any of these forward-looking statements, which speak only as of the date of the
statement was made. Candie's undertakes no obligation to update any
forward-looking statement.
The Company
Candie's is in the business of licensing the CANDIE'S(R) and BONGO(R)
names on a variety of young women's footwear, apparel and fashion products.
Through its wholly owned subsidiary, Bright Star Footwear, LLC, the Company also
arranges for the manufacture of private label men's footwear products for mass
market and discount retailers.
Candie's had been a leading designer, distributor and marketer of jeans
wear under the BONGO brand through its wholly-owned subsidiary, Unzipped
Apparel, LLC, referred to as Unzipped. On June 9, 2004, Candie's entered into an
agreement with TKO Apparel Licensing, Inc., referred to as TKO, under which TKO
has agreed to purchase certain assets of Unzipped from Candie's on or before
February 1, 2005 for a purchase price to be determined at the closing. Candie's
also entered into a long-term licensing agreement with TKO, which commenced in
August 2004, pursuant to which TKO, through Unzipped, designs, manufactures and
sells BONGO jeans throughout the United States.
Candie's was incorporated under the laws of the State of Delaware in
1978. Its principal executive offices are located at 215 West 40th Street, New
York, New York 10018, and its telephone number is (212) 730-0300.
Unless the context requires otherwise, reference in this prospectus to
"we", "us" ,"our", "Candie's", or "Company" refers to Candie's, Inc. and its
subsidiaries.
Recent Developments
On October 29, 2004 (the "Closing Date"), Candie's, through a wholly-owned
subsidiary, acquired from B.E.M. Enterprise, Ltd., referred to as "B.E.M.",
which is the selling stockholder under this prospectus, its principal assets
(the "Purchased Assets") for the designer business "Badgley Mischka", and the
assumption of two existing licenses with Pronovias USA for bridal gowns (which
expires on December 31, 2005) and BC International for fur coats (which expires
on January 30, 2005). Additionally, the Company acquired the rights to operate
the Badgley Mischka retail store located on Rodeo Drive in Beverly Hills,
California effective January 1, 2005 at which time the lease for such premises
is to be assumed by Candie's. Moreover, a subsidiary of Candie's entered into
employment agreements with Mark Badgley and James Mischka.
3
The purchase price for the Purchased Assets was paid by the issuance of
214,981 shares of Candie's common stock, $.001 par value (the "Shares"). The
purchase price of the Purchased Assets is subject to an upward adjustment in the
event that the closing sale price of the Candie's common stock on the date which
is 180 days after the Closing Date is less than the closing sale price on the
Closing Date. Any such adjustment will also be paid in shares of Candie's common
stock (the "Additional Shares"). The Shares and the Additional Shares, if any,
have been registered for sale by B.E.M. pursuant to this prospectus.
Risk Factors
We operate in a changing environment that involves numerous known and
unknown risks and uncertainties that could materially adversely affect our
operations. The following highlights some of the factors that have affected, and
in the future could affect, our operations.
We have incurred losses during recent fiscal years and future losses could
negatively affect our cash flows and business operations.
In the fiscal year ended January 31, 2004, we sustained net losses of $
11.3 million, and net losses of $3.9 million, $2.3 million and $8.2 million
during our fiscal years ended January 31, 2003, 2002 and 2001, respectively. We
cannot guarantee that we will not incur losses in the future.
We are no longer engaged in the design, manufacture, distribution or sale of
CANDIE'S or BONGO branded footwear products or BONGO branded jeans wear in the
United States and, consequently, our revenues are, or will be, dependent on the
success of certain licensees of those rights.
Although the licensing agreements for our CANDIE'S and BONGO branded
footwear and the licensing agreement with TKO for the BONGO branded jeans wear
require the advance payment to us of certain fees and provide for certain
guaranteed minimum royalty payments to us, the failure by the licensees to
satisfy their obligations under the agreements could result in the termination
of the license agreements and an interruption in the royalty stream. Moreover,
during the terms of the license agreements, we are substantially dependent upon
the abilities of the licensees to maintain the quality, marketability and
consumer recognition of footwear products bearing either of the CANDIE'S or
BONGO brands and jeans wear bearing the BONGO brand. In addition, failure by the
licensees to meet their production, manufacturing or distribution requirements
with respect to the CANDIE'S or BONGO branded footwear products or BONGO branded
jeans wear products could negatively impact their sales and resulting royalty
payments to us which, in turn, would materially adversely affect our revenues
and business operations. Moreover, the failure by licensees to meet their
financial obligations to us could jeopardize our ability to meet the debt
service coverage ratio in connection with the asset-backed notes issued by one
of our subsidiaries which would give the note holders the right to foreclose on
our trademarks and other related intellectual property assets, which are the
security for the debt.
4
Our business is dependent on continued market acceptance of the products of our
licensees that bear our trademarks and of the CANDIE'S and BONGO trademarks.
Our ability to achieve continued market acceptance of our existing
products, products of our licensees utilizing the CANDIE'S and BONGO trademarks
as well as market acceptance of any future products that may be offered by us or
by our licensees that bear our trademarks, is subject to a high degree of
uncertainty. Our ability or the ability for our licensees to achieve market
acceptance by new customers or continued market acceptance by existing or past
customers will require substantial additional marketing efforts and the
expenditure of significant funds by us to create a demand for such products.
Additional marketing efforts and expenditures may not result in increased market
acceptance of products of our licensees or increased sales of such products. We
are materially dependent on the sale of products bearing the CANDIE'S and BONGO
trademarks for a significant portion of our revenues. A failure of our CANDIE'S
or BONGO trademarks or products to achieve or maintain market acceptance could
reduce our licensing revenues, thereby negatively impacting cash flows.
We had a working capital deficit at July 31, 2004, have incurred a substantial
amount of indebtedness and to the extent that cash flow from our continuing
operations is insufficient to meet the our debt obligations, we may be required
to seek additional financing to satisfy our obligations.
As of the date of this prospectus there is approximately $18.9 million
principal outstanding on seven-year asset backed notes issued by one of our
subsidiaries in August 2002. In addition, in connection with our acquisition in
April 2002 from Sweet Sportswear, Inc. of the joint venture formed with Sweet,
we issued to Sweet $11.0 million principal amount of senior subordinated notes
the amount of which have been reduced to approximately $7.8 million as a result
of certain shortfalls in the net income of Unzipped that Sweet guaranteed under
the terms of the agreement under which it managed Unzipped, although it may be
furthered reduced by offset of additional losses. These notes will mature in
2012. Moreover, we had a working capital deficit of approximately $754,000 at
July 31, 2004. In the event that projected cash flow proves to be insufficient
to satisfy our cash requirements including our debt obligations, we may be
required to seek additional funds through, among other means, public or private
equity or debt financing, which may result in dilution to our stockholders. Our
failure to obtain any required additional financing on terms acceptable to us,
or at all, could result in the acceleration of the payment obligations of
certain of our indebtedness that could materially adversely affect our business
operations and financial position.
A recession in the fashion industry or rapidly changing fashion trends could
harm our operating results.
The fashion industry is cyclical, with purchases of apparel and related
goods tending to decline during recessionary periods when disposable income is
low. A poor general economic climate could have a negative impact on our and our
licensees' ability to compete for limited consumer resources. Moreover, our
future success depends in substantial part on our and our licensees' ability to
anticipate and respond to changing consumer demands and fashion trends in a
timely manner and for us to create effective marketing for those products. The
footwear and wearing apparel industries are generally subject to constantly
changing fashion trends. If we or our licensees misjudge the market for a
particular product or product line, it may result in a decrease in the amount of
revenue we realize from our licenses.
5
All of our licensees rely on unaffiliated manufacturers and suppliers and,
therefore, may be subject to timing or production problems that are beyond their
control.
Our licensees do not own or operate any manufacturing facilities The
manufacturers of our licensed products have limited production capacity and may
not, in all instances, have the capability to satisfy our licensees
manufacturing requirements. In such event, the capacity of alternative
manufacturing sources may not be available to our licensees on a cost effective
basis. Accordingly, our licensees' dependence upon third parties for the
manufacture of our licensed products could have an adverse effect on their
ability to deliver products on a timely and competitive basis and could have an
adverse effect on our revenues and cash flows from the licenses. Moreover, our
licensees operate under substantial time constraints which require them to have
production orders in place at specified times in advance of the customers'
retail selling seasons. If the suppliers fail to meet their delivery date
requirements pursuant to purchase orders with the licensees, they will be unable
to meet our delivery date requirements pursuant to purchase orders with their
customers. This could result in the cancellation of purchase orders both by our
licensees and their customers, having an adverse effect on our licensing
revenues and earnings.
Our licensees are subject to risks and uncertainties of foreign manufacturing
that could reduce our licensing revenues.
Substantially all of the products sold by our licensees are manufactured
overseas. Our licensees are subject to various risks inherent in foreign
manufacturing, all of which can have a significant impact on our licensees'
sales of licensed products and consequently, our earnings, including:
- increased credit risks;
- fluctuations in foreign currency exchange rates;
- shipping delays; and
- international political, regulatory and economic developments.
Because of the intense competition in our markets and the strength of our
competitors, we and our licensees may not be able to continue to compete
successfully.
The footwear and apparel industries are extremely competitive in the
United States and we and our licensees face intense and substantial competition
for our product lines. In general, competitive factors include quality, price,
style, name recognition and service. In addition, the presence in the
marketplace of various fads and the limited availability of shelf space can
affect competition. Many of our competitors have greater financial,
distribution, marketing and other resources than we have and have achieved
significant name recognition for their brand names. In addition, since we
license our brands, our licensees need to achieve a higher margin to enable them
to pay the royalty. As a result, our licensees may be unable to successfully
compete in the markets for such products.
6
We may not be able to protect our proprietary rights or avoid claims that we
infringe on the proprietary rights of others.
We own federal trademark registrations for CANDIE'S and BONGO, among
others, and believe that our CANDIE'S trademark and our BONGO trademark have
significant value and are important to the marketing of our products. To the
extent that the CANDIE'S, BONGO or other trademarks owned or used by us are
deemed to violate the proprietary rights of others, or in the event that these
trademarks would not be upheld if challenged, we would, in either such event, be
prevented from using the trademarks, which could have an adverse effect on us.
In addition, we may not have the financial resources necessary to enforce or
defend trademarks owned or used by us.
We are dependent upon our key executives and other personnel, whose loss would
adversely impact our business.
Our success is largely dependent upon the efforts of Neil Cole, our
President, Chief Executive Officer and Chairman. The Company's current
employment agreement with Mr. Cole, expires in January 2005 and the loss of his
services could have a material adverse effect on our business and prospects. Our
success is also dependent upon our ability to hire and retain additional
qualified sales and marketing personnel in connection with the design, marketing
and distribution of our products as well as our ability to hire and retain
administrative personnel. We may not be able to hire or retain such necessary
personnel or may not have the financial resources to attract the kind of talent
required for our business.
Provisions in our charter and share purchase rights plan may prevent an
acquisition of Candie's.
Certain provisions of our Certificate of Incorporation and our Share
Purchase Rights Plan could have the effect, either alone or in combination with
each other, of making more difficult, or discouraging an acquisition of our
company deemed undesirable by our Board of Directors. Our Certificate of
Incorporation provides for the issuance of up to 75,000,000 shares of common
stock and 5,000,000 shares of preferred stock. As of the date of this prospectus
there were approximately 27,533,000 shares of our common stock and no shares of
preferred stock outstanding. Additional shares of our common stock and preferred
stock are therefore available for future issuance without stockholder approval.
The Share Purchase Rights Plan, commonly known as a "poison pill," states that,
in the event than an individual or entity acquires 15% of the outstanding shares
of our stockholders other than the acquirer may purchase additional shares of
our common stock for a fixed price. The existence of authorized but un-issued
capital stock, together with the existence of the Share Purchase Rights Plan,
could have the effect of discouraging an acquisition of us.
7
We are subject to certain litigation that could harm us.
We are currently a defendant in a breach of contract action commenced
against us by one of our former buying agents that also supplied us with certain
footwear. Our financial condition could be harmed if we were required to pay the
monetary damages sought by the plaintiff. We are also a plaintiff in an action
against the former manager of Unzipped and cannot assure you that Unzipped will
not seek to file counterclaims against us that may seek to recover monetary
damages from us.
We do not expect to pay dividends on our common stock.
We have not paid any cash dividends on our common stock to date and do
not expect to pay dividends for the foreseeable future. Under existing loan
agreements with our principal lender, we are not permitted to pay dividends
without the lender's consent.
The market price of our common stock may be volatile.
The market price of our common stock may be highly volatile.
Disclosures of our operating results, announcements of various events by us or
our competitors and the development and marketing of new products affecting our
industry may cause the market price of our common stock to change significantly
over short periods of time. Sales of shares under this prospectus may have a
depressive effect on the market price of our common stock.
Future sales of shares of our common stock could affect the market price of our
common stock and our ability to raise additional capital.
We have previously issued a substantial number of shares of common
stock, which are eligible for resale under Rule 144 of the Securities Act, and
may become freely tradable. We have also registered a substantial number of
shares of common stock that are issuable upon the exercise of options and
warrants and have previously registered for resale a substantial number of
restricted shares of common stock held by certain selling stockholders, which
are in addition to the 214,981 shares, and any Additional Shares, that may be
offered under this prospectus by the selling stockholder. If holders of options
or warrants choose to exercise their purchase rights and sell shares of common
stock in the public market, or if holders of currently restricted shares choose
to sell such shares in the public market under Rule 144 or otherwise, the
prevailing market price for our common stock may decline. Future public sales of
shares of common stock may adversely affect the market price of our common stock
or our future ability to raise capital by offering equity securities.
Use of Proceeds
We will not receive any proceeds from the sale by the selling
stockholder named in this prospectus.
We have agreed to pay expenses in connection with the registration of
the shares being offered by the selling stockholder.
8
Selling Stockholder
Based on information provided by the selling stockholder, the following
table sets forth certain information regarding the selling stockholder:
The table below assumes for calculating the selling stockholder's
beneficial and percentage ownership that options, warrants or convertible
securities that are held by such stockholder (but not held by any other person)
and are exercisable within 60 days from the date this prospectus have been
exercised and converted. The table also assumes the sale of all of the shares
being offered by the selling stockholder pursuant to this prospectus.
Common Stock Beneficially
Owned After the Offering
Number of Shares of --------------------------
Common Stock Percent of
Beneficially Owned Shares Number Outstanding
Selling Security Holder Prior to the Offering Being Offered of Shares Shares
----------------------- --------------------- ------------- --------- -----------
B.E.M. Enterprise, Ltd. (1) 214,981 (2) 214,891 (2) 0 0
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(1) Mr. Wolfgang Ley, the Chairman of B.E.M, has sole voting and investment
power with respect to the shares being offered by the selling
stockholder pursuant to this prospectus. Upon the appointment of a new
President of B.E.M., both Mr. Ley and the President will have voting
and investment power with respect to the shares.
(2) Does not reflect any Additional Shares that may be issued by Candie's
to the selling stockholder according to the terms of the Asset Purchase
Agreement pursuant to which the Shares were issued. Any Additional
Shares that may be issued to the selling stockholder are covered by the
registration statement of which this prospectus forms a part.
Plan of Distribution
We have been advised that the selling stockholder, which may include
pledgees, donees, transferees or other successors-in-interest who have received
shares from the selling stockholder after the date of this prospectus, may from
time to time, sell all or a portion of the shares in privately negotiated
transactions or otherwise, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to these market prices or at
negotiated prices.
All costs, expenses and fees in connection with the registration of the
shares offered by this prospectus shall be borne by us. Brokerage costs, if any,
attributable to the sale of shares will be borne by the selling stockholder.
9
The shares may be sold by the selling stockholder by one or more of the
following methods:
o block trades in which the broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
shares as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such broker
dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o through put and call options relating to the shares;
o negotiated transactions;
o a combination of any such methods of sale at market prices prevailing
at the time of the sale or at negotiated prices; and
o any other method permitted pursuant to applicable law.
The transactions described above may or may not involve brokers or
dealers.
The selling stockholder will not be restricted as to the price or
prices at which the selling stockholder may sell its shares. Sales of shares by
the selling stockholder may depress the market price of our common stock since
the number of shares which may be sold by the selling stockholder is relatively
large compared to the historical average weekly trading of our common stock.
Accordingly, if the selling stockholder were to sell, or attempt to sell, all of
such shares at once or during a short time period, we believe such a transaction
could adversely affect the market price of our common stock.
From time to time the selling stockholder may pledge its shares under
margin provisions of customer agreements with its brokers or under loans with
third parties. Upon a default by the selling stockholder, the broker or such
third party may offer and sell any pledged shares from time to time.
In effecting sales, brokers and dealers engaged by the selling
stockholder may arrange for other brokers or dealers to participate in the sales
as agents or principals. Brokers or dealers may receive commissions or discounts
from the selling stockholder or, if the broker-dealer acts as agent for the
purchaser of such shares, from the purchaser in amounts to be negotiated, which
compensation as to a particular broker dealer might be in excess of customary
commissions which are not expected to exceed those customary in the types of
transactions involved. Broker-dealers may agree with the selling stockholder to
sell a specified number of such shares at a stipulated price per share, and to
the extent the broker-dealer is unable to do so acting as agent for a selling
stockholder, to purchase as principal any unsold shares at the price required to
fulfill the broker-dealer commitment to the selling stockholder. Broker-dealers
who acquire shares as principal may then resell those shares from time to time
in transactions
10
o in the over-the counter market or otherwise;
o at prices and on terms prevailing at the time of sale;
o at prices related to the then-current market price; or
o in negotiated transactions.
These resales may involve block transactions or sales to and through
other broker-dealers, including any of the transactions described above. In
connection with these sales, these broker-dealers may pay to or receive from the
purchasers of those shares commissions as described above. The selling
stockholder may also sell the shares in open market transactions under Rule 144
under the Securities Act, rather than under this prospectus.
The selling stockholder and any broker-dealers or agents that
participate with the selling stockholder in sales of the shares may be deemed to
be "underwriters" within the meaning of the Securities Act in connection with
these sales. In this event, any commissions received by these broker-dealers or
agents and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
We have agreed to indemnify the selling stockholder against certain
liabilities under the Securities Act. The selling stockholder may agree to
indemnify any agent, dealer or broker-dealer that participates in transactions
involving sales of the shares against certain liabilities, including liabilities
arising under the Securities Act.
The selling stockholder is subject to applicable provisions of the
Securities Exchange Act of 1934 and the SEC's rules and regulations, including
Regulation M, which provisions may limit the timing of purchases and sales of
the shares by the selling stockholder.
In order to comply with certain states' securities laws, if applicable,
the shares may be sold in those jurisdictions only through registered or
licensed brokers or dealers. In certain states the shares may not be sold unless
the shares have been registered or qualified for sale in such state, or unless
an exemption from registration or qualification is available and is obtained.
Legal Matters
Blank Rome LLP of New York, New York will pass upon the validity of the
shares of common stock being offered by this prospectus.
Experts
The consolidated balance sheets as of January 31, 2004 and 2003 and the
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended January 31, 2004, incorporated by
reference in this prospectus, have been included herein in reliance on the
report of BDO Seidman, LLP, independent registered public accountants, given on
the authority of that firm as experts in auditing and accounting.
11
Where You Can Find More Information
We are subject to the informational requirements of the Securities
Exchange Act of 1934 and we file reports and other information with the SEC.
You may read and copy any of the reports, statements, or other
information we file with the SEC at the SEC's Public Reference Section at 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Information on
the operation of the Public Reference Room may be obtained by calling the SEC at
1-800-SEC-0330. The SEC maintains a Web site at http://www.sec.gov that contains
reports, proxy statements and other information regarding issuers that file
electronically with the SEC. The Nasdaq Stock Market maintains a Web site at
http://www.nasdaq.com that contains reports, proxy statements and other
information filed by us.
Incorporation of Certain Documents By Reference
We have filed with the SEC, Washington, D.C., a registration statement
on Form S-3 under the Securities Act of 1933, covering the securities offered by
this prospectus. This prospectus does not contain all of the information that
you can find in our registration statement and the exhibits to the registration
statement. Statements contained in this prospectus as to the contents of any
contract or other document referred to are not necessarily complete and in each
instance such statement is qualified by reference to each such contract or
document filed or incorporated by reference as an exhibit to the registration
statement.
The SEC allows us to "incorporate by reference" the information we file
with them. This means that we can disclose important information to you by
referring you to other documents that are legally considered to be part of this
prospectus, and later information that we file with the SEC will automatically
update and supersede the information in this prospectus and the documents listed
below. We incorporate by reference the documents listed below, and any future
filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until the selling stockholders sell all the
shares.
1. Our Annual Report on Form 10-K for the fiscal year ended January 31,
2004;
2. Our Quarterly Report on Form 10-Q for the quarter ended April 30,
2004;
3. Our Quarterly Report on Form 10-Q for the quarter ended July 31, 2004;
4. Our Current Report on Form 8-K for the event dated August 25, 2004;
5. Our Current Report on Form 8-K for the event dated September 9, 2004;
6. Form 8-K/A Amendment No. 1 to our Form 8-K for the event dated
September 9, 2004;
12
7. Form 10-Q/A for the quarter ended April 30, 2004;
8. Our Current Report on Form 8-K for the event dated October 29, 2004;
9. The description of our common stock and our preferred share purchase
rights contained in our registration statements on Form 8-A filed with
the SEC and any amendments thereto; and
10. All documents filed by us pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 subsequent to the date of
this prospectus and prior to the termination of this offering, except
the Compensation Committee Report on Executive Compensation and the
performance graph included in any Proxy Statement filed by us pursuant
to Section 14 of the Exchange Act.
You may request a copy of these filings, at no cost, by writing or
telephoning us at Candie's, Inc., 215 West 40th Street, New York, New York
10018, telephone number (212) 730-0030.
We have not authorized anyone else to provide you with information
different from that contained or incorporated by reference in this prospectus.
This prospectus is not an offer to sell nor is it a solicitation of an offer to
buy any security in any jurisdiction where the offer or sale is not permitted.
Neither the delivery of this prospectus nor any sale made under this prospectus
shall, under any circumstances, imply that there has been no change in our
affairs since the date of this prospectus or that the information contained in
this prospectus or incorporated by reference herein is correct as of any time
subsequent to its date.
13
Candie's, Inc.
214,981 shares of Common Stock
Prospectus
_________, 2004
14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses payable by the Registrant in connection with the issuance
and distribution of the securities being registered (estimated except for the
SEC Registration fee)are as follows:
SEC Registration Fee $ 231.07
Accounting Fees and Expenses $10,000.00
Legal Fees and Expenses $10,000.00
Miscellaneous Expenses $ 4,768.93
Total $25,000.00
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
("GCL") provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorizes Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director.
Section 102(b) of the GCL permits a corporation, by so providing in its
certificate of incorporation, to eliminate or limit director's liability to the
corporation and its shareholders for monetary damages arising out of certain
alleged breaches of their fiduciary duty. Section 102(b)(7) of the GCL provides
that no such limitation of liability may affect a director's liability with
respect to any of the following: (i) breaches of the director's duty of loyalty
to the corporation or its shareholders; (ii) acts or omissions not made in good
faith or which involve intentional misconduct of knowing violations of law;
(iii) liability for dividends paid or stock repurchased or redeemed in violation
of the GCL; or (iv) any transaction from which the director derived an improper
personal benefit. Section 102(b)(7) does not authorize any limitation on the
ability of the corporation or its shareholders to obtain injunctive relief,
specific performance or other equitable relief against directors.
Article Ninth of the registrant's Certificate of Incorporation and the
registrant's By-laws provide that all persons who the registrant is empowered to
indemnify pursuant to the provisions of Section 145 of the GCL (or any similar
provision or provisions of applicable law at the time in effect), shall be
indemnified by the registrant to the full extent permitted thereby. The
foregoing right of indemnification shall not be deemed to be exclusive of any
other rights to which those seeking indemnification may be entitled under any
by-law, agreement, vote of shareholders or disinterested directors, or
otherwise.
Article Tenth of the registrant's Certificate of Incorporation provides
that no director of the registrant shall be personally liable to the registrant
or its stockholders for any monetary damages for breaches of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the registrant or its stockholders; (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law; (iii) under Section 174 of the GCL; or (iv) for any transaction from which
the director derived an improper personal benefit.
The registrant's employment agreements with Mr. Neil Cole, the
registrant's Chief Executive Officer and Ms. Deborah Sorell Stehr, the
registrant's Senior Vice President and General Counsel provide that the
registrant shall indemnify each of them for the consequences of all acts and
decisions made by such person while performing services for the registrant.
These agreements also require the registrant to use its best efforts to obtain
directors' and officers' liability insurance for such persons.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
Item 16. Exhibits.
5 Opinion of Blank Rome LLP
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Blank Rome LLP (included in Exhibit 5)
24 Power of Attorney (included on the signature page of the
Registration Statement)
Item 17. Undertakings
Undertaking Required by Regulation S-K, Item 512(a).
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
i. To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended
(the "Securities Act");
ii. To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
iii. To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, that clauses (i) and (ii) do not apply if the Registration
Statement is on Form S-3, Form S-8 or Form F-3, and the information required to
be included in a post-effective amendment by such clauses is contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Undertaking Required by Regulation S-K, Item 512(b).
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be initial bona fide offering thereof.
Undertaking required by Regulation S-K, Item 512(h).
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or controlling persons pursuant to
the foregoing provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 15th day of
November 2004.
CANDIE'S, INC.
By:/s/ Neil Cole
-------------------------------------
Neil Cole
President and Chief Executive Officer
Each person whose signature appears below authorizes each of Neil Cole
and Richard Danderline, or either of them acting individually, as his true and
lawful attorney-in-fact, each with full power of substitution, to sign the
Registration Statement on Form S-3 of Candie's, Inc., including any and all
pre-effective and post-effective amendments, in the name and on behalf of each
such person, individually and in each capacity stated below, and to file the
same, with exhibits thereto and other documents in connection therewith with the
Securities and Exchange Commission.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following person in the capacities and
on the dates stated.
Signature Title Date
--------- ----- ----
/s/Neil Cole Chief Executive Officer, President and November 15, 2004
--------------------- Director (Principal Executive Officer)
Neil Cole
/s/Richard Danderline Executive Vice President of Operations November 15, 2004
--------------------- and Finance (Principal Financial and
Richard Danderline Accounting Officer)
/s/Barry Emanuel Director November 15, 2004
---------------------
Barry Emanuel
/s/Steven Mendelow Director November 15, 2004
---------------------
Steven Mendelow
/s/Robert D'Loren Director November 15, 2004
---------------------
Robert D'Loren
/s/Michael Caruso Director November 15, 2004
---------------------
Michael Caruso
/s/Michael Groveman Director November 15, 2004
---------------------
Michael Groveman
/s/Drew Cohen Director November 15, 2004
---------------------
Drew Cohen